25.25.9 Revenue Protection Prisoner Lead Procedures

Manual Transmittal

September 20, 2018

Purpose

(1) This transmits revised IRM 25.25.9, Revenue Protection, Prisoner Lead Procedures.

Material Changes

(1) Editorial changes made throughout the IRM section.

(2) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.1 update RICS to RIO

(3) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.1.1 update RICS to RIO

(4) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.1.2 add quality control

(5) IPU 18U0372 issued 02-28-2018 IRM 25.25.9.1.3 added IRC descriptions

(6) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.1.3 update IRC title

(7) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.1.4 update RICS to RIO

(8) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.1.6 added related resources

(9) IPU 18U0372 issued 02-28-2018 IRM 25.25.9.1.6 added related resources

(10) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.2 Prisoner Lead Overview - added

(11) IPU 18U0071 issued 01-08-2018 IRM 25.25.9.2 paragraph 3 removed, now in 25.25.9.5

(12) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.3 Prisoner Lead Clerical Sort and Routing of Initial Receipts - added

(13) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.3.1 Prisoner Lead Clerical Processing of Correspondence and Forms - added

(14) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.3.2 Prisoner Lead Tax Examiner Processing of Correspondence and Forms - added

(15) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.3.2 (1) box 4 add Disclosure link

(16) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.4 EITC definition added

(17) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.5 Prisoner Return Processing - added

(18) IPU 18U0071 issued 01-08-2018 IRM 25.25.9.5 change to alphalist

(19) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.5 add note to update IDOCs

(20) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.6 Form 1040X deleted

(21) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.6 remove IDT table and add routing to IDVTA

(22) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.7 renumbered to IRM 25.25.9.6 and added Form 14039 table

(23) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.8 Prisoner Payments removed

(24) IPU 18U0071 issued 01-08-2018 IRM 25.25.9.8 correct link

(25) IPU 18U0071 issued 01-08-2018 IRM 25.25.9.8.1 correct link

(26) IPU 18U0372 issued 02-28-2018 IRM 25.25.9.8.1 (3) box 3 and 4 add disposition to DL

(27) IPU 18U1200 issued 08-24-2018 IRM 25.25.9.8.1 (3) box 1 added fax procedures link

(28) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.9 Balance Due Accounts removed

(29) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.10 Form W-2 removed

(30) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.11 Open Exam removed

(31) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.12 Address Change Request removed

(32) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.13 Refund Inquires renumbered to IRM 25.25.9.7 - direction added

(33) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.14 Prison Leads Involving Refund Checks renumbered to IRM 25.25.9.8 - direction added

(34) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.8.1 Prisoner Refund Check Inquiries and Processing Returned Prisoner Tax Refund Treasury Checks – Kansas City ONLY - added

(35) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.15 Processing Returned Prisoner Treasury Checks removed

(36) IPU 17U1663 issued 12-08-2017 IRM 25.25.9.16 Processing Returned Prisoner Treasury Checks- Kansas City ONLY removed

Effect on Other Documents

IRM 25.25.9 effective 9-19-2017 is superseded. This IRM also incorporates the following IRM Procedural Updates (IPUs): IPU , 17U1663 issued 12-08-2017, 18U071 issued 1-08-2018, 18U0372 issued 2-28-2018 and 18U1200 issued 08-24-2018.

Audience

Campus employees in Integrity & Verification Operation, Return Integrity and Compliance Services

Effective Date

(09-20-2018)

Related Resources

The following IRMs should be used in conjunction with one another:

  • IRM 25.25.1, Integrity and Verification Operation (IVO) Business Master File (BMF) Procedures

  • IRM 25.25.2, Revenue Protection Screening Procedures for Individual Master File Returns

  • IRM 25.25.3, Revenue Protection Verification Procedures for Individual Master File Returns

  • IRM 25.25.4, Integrity and Verification Identity Theft Return Procedures

  • IRM 25.25.5, Revenue Protection Special Handling Procedures

  • IRM 25.25.6, Taxpayer Protection Program

  • IRM 25.25.7, Automated Questionable Credit Program

  • IRM 25.25.8, Revenue Protection External Leads Procedures

  • IRM 25.25.10, Frivolous Return Program

  • IRM 25.25.11, Wage and Withholding (WOW) Only Procedures

  • IRM 25.25.12, Fraud Evaluation and Referral Procedures for Integrity and Verification

  • IRM 25.25.13, Account Resolution for Integrity and Verification Operation (IVO)

Denise D. Davis
Director, Return Integrity Operation
Wage and Investment Division

Program Scope and Objectives

  1. Purpose and Program Goals: This IRM section provides guidance for Integrity and Verification Operation (IVO) employees when in receipt of prisoner correspondence/returns/checks received through the Blue Bag Program from participating institutions.

  2. Audience: The audience intended in this IRM is IVO employees.

  3. Policy Owner: The Return Integrity Operation (RIO) is the policy owner of this program.

  4. Program Owner: RIO is the program office responsible for oversight over this program.

Background

  1. Return Integrity Operation (RIO) strengthens the integrity of the tax system by:

    • Protecting the public interest by improving IRS’s ability to detect and prevent improper refunds

    • Serving the public interest by taking actions fairly and appropriately to identify, evaluate and prevent the issuance of improper refunds

    • Helping taxpayers understand the refundable tax credits for which they are eligible.

    • Recover Improper Payments

Program Management and Review

  1. The program has reports to track the inventory, including receipts and closures.

  2. A quality control program is in place to review all processes to ensure accuracy and effectiveness.

Authority

  1. Refer to the following:

    • IRM 1.2.13.1.10, Policy Statement 4-21

    • IRM 1.1.13, Organization and Staffing, Wage and Investment Division.

    • Various Internal Revenue Codes (IRC) including but not limited to:

    • IRC 6402(a), Authority to make credits or refunds

    • IRC 6401, Amounts treated as overpayments

    • IRC 6404, Abatements of tax

    • IRC 6213, Restrictions on assessments and math error authority

  2. Refer to IRC GATT §32(c)(2)(B)(iv) for more information on GATT rule of disqualifying a prisoner’s income earned during incarceration for EITC.

Responsibilities

  1. Return Integrity Operation (RIO) has responsibility for information in this IRM. Information is published in the IRM on a yearly basis.

  2. The Director of RIO is responsible for the policy related to this IRM.

  3. The Chief of the Data Management and Operation Staff (DMOS) is responsible for ensuring this IRM is timely submitted to publishing each year.

  4. More information can be found in IRM 1.1.13.7, Return Integrity and Compliance Services.

Acronyms

  1. For a list of Acronyms used throughout Integrity and Verification Operation (IVO) see IRM 25.25.1.1.5, Acronyms.

Related Resources

  1. The related resources listed below may be utilized for account research and issue resolution. These related resources may be accessed through the IRS Intranet-Servicewide Electronic Research Program (SERP) site.

    • IRM 25.25, Revenue Protection

    • IRM 25.23, Identity Protection and Victim Assistance

    • IRM 21, Customer Account Services

    • IRM 2, Information Technology

    • IRM 3, Submission Processing

    • IRM 4, Examining Process

  2. IDRS restricted access accounts are accounts where a user must request special permissions to access the account through IDRS. Follow IRM 21.2.1.3.2, Authorized IDRS Access.

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Prisoner Lead Processing Overview

  1. Non-IVO functions will route all items as appropriate based on existing IRM guidance and procedures.

  2. Items received in IVO from correctional facilities through the Blue Bag Program will be date stamped by the receiving office, sorted into the following categories and routed as appropriate:

    • Tax returns - any Form 1040, U.S. Individual Income Tax Return, series (including copies and unsigned returns). Route returns to MS 6575 Prisoner Return KCSC, 333 Pershing Rd, Kansas City, MO 64108.

      Exception:

      1040X amended filings currently under Examination (including copies and unsigned returns). Route returns under examination to the appropriate Exam Campus per SERP routing guide.

    • Checks
      Treasury checks - IRS refund check - route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd, Kansas City, MO 64108.
      Treasury checks - Non IRS check - route to MS 975 Blue Bag BSC, 1040 Waverly Ave, Holtsville, NY 11742.
      Non-Treasury checks - payable to the taxpayer - route to MS 975 Blue Bag BSC, 1040 Waverly Ave, Holtsville, NY 11742.
      Non-Treasury checks - payable to the IRS - Route to local Submission Processing for posting to taxpayer’s account.
      Non-Treasury checks - payable to another agency - forward to appropriate agency (e.g. State or Local Tax Board).

    • Correspondence - route to MS 975 Blue Bag BSC, 1040 Waverly Ave, Holtsville, NY 11742.

Prisoner Lead Clerical Sort and Routing of Initial Receipts

  1. The Unit Control Clerk (UC) will date stamp all items received into the Operation, including undeliverable and non-delivered mail.

  2. The UC will review all items received for updated Incarceration/Release information and capture such data for the Operation on the provided FTBOL-FY20XXspreadsheet.

  3. All correspondence will be counted as receipts and loaded to the Blue Bag Lead Management System (Blue Bag LMS) by the UC, with the following exceptions:

    • mail from prison officials regarding IRS programs (route to Lead)

    • requests for program supplies (UC will follow-up on requests)

  4. UC will establish a control base for each piece of correspondence under the appropriate module.

    Exception:

    Undeliverable mail is not considered correspondence. Undeliverable mail should be returned to the originator.

  5. Returns received should be re-routed as shown below.

    • Tax returns - any Form 1040 series (including copies and unsigned returns) - route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd, Kansas City, MO 64108.

      Exception:

      1040X amended filings currently under Examination (including copies and unsigned returns) - route to the appropriate exam campus using the Routing Guide.

  6. Checks will be processed as follows:

    1. Treasury checks - IRS refund checks - route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd, Kansas City, MO 64108.

    2. Treasury checks - Non IRS check - return to facility using "non-IRS check quick note" .

    3. Non-Treasury checks - payable to the taxpayer - return to facility using "non-IRS check quick note."

    4. Non-Treasury checks - payable to the IRS - route to local Submission Processing for posting to taxpayer’s account. See paragraph (7) below.

    5. Non-Treasury checks - payable to another agency - forward to appropriate agency (e.g. State or Local Tax Board).

  7. If a live personal check is received take the following actions:

    1. Complete Form 4287, Record of Discovered Remittance.

    2. Attach a photocopy of the personal check and any pertinent information to the Form 4287.

    3. Notate any important information on the check such as the taxpayer’s Social Security Number (SSN), tax period and form number for correct processing.

    4. Route the check to Campus Support to be processed, see IRM 3.8.46.4, Remittance Discovered at a Campus Support Site.

Prisoner Lead Clerical Processing of Correspondence and Forms

  1. The UC will close the control base, route, and take actions on the following correspondence items as shown in the chart below.

    Note:

    The UC will also notate and close cases in Blue Bag LMS as appropriate.

    Type of Receipt Actions needed
    1
    Non-delivered mail/items addressed to taxpayer (i.e. CP 2000 addressed to taxpayer returned unopened).
    Prepare Letter 4877 for correspondence and return to the taxpayer.
    2
    Outgoing personal mail from taxpayer (i.e. letter to relative, letter to state tax department).
    Forward as appropriate.
    3
    Form 4506, Request for Copy of Tax Return or Form 4506-T, Request for Transcript of Tax Return.
    Route to RAIVS per the booklet instructions.
    4
    Form W-7, Application for IRS Individual Taxpayer Identification Number, or W-7(SP), Application for IRS Individual Taxpayer Identification Number - Spanish.
    • Route to Internal Revenue Service, ITIN Operation, Mail Stop 6090-AUSC, 3651 S. Interregional Hwy 35, Austin, TX 78741-0000.

    • Notate on Form 3210, Document Transmittal, that the filer is an inmate, and attach a copy of a CC FTBOL print if there is data present.

    5
    Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization.
    Route to Centralized Authentication File (CAF) function on Form 3210, Document Transmittal.
    6
    Form SS-4, Application for Employer Identification Number.
    Route to Internal Revenue Service Center, Attention: EIN Operation, Cincinnati, OH 45999.
    7
    Form 3911 ,Taxpayer Statement Regarding Refund or Form 3913, Acknowledgment of Returned Refund Check.
    Route to BSC Refund Inquiry Unit Stop 547.
  2. UC will provide a daily accurate accounting to Lead of correspondence receipts and closures.

  3. All other items not listed above, are to be filed within the Operation for assignment to a tax examiner.

Prisoner Lead Tax Examiner Processing of Correspondence and Forms

  1. The tax examiner will re-route and take actions on the following correspondence items as shown in the chart below, in addition to updating all systems as appropriate:

    Type of correspondence Actions to take
    1
    • Informant letters

    • ID Theft lists

    Route to Criminal Investigation per routing guide.
    2
    Preparer Complaint
    Send Letter 131C, Request for Information, include 14157, Return Preparer Complaint. See Letters Job Aide for a list of paragraphs.
    3
    Request for Credit Report
    Send credit report quick note to inmate.
    4
    FOIL/FOIA Requests
    Route to Disclosure Office. See FOIA and/or Privacy Act Request Contacts.
    5
    Request for copy of Employer Identification Number (EIN)
    Classified waste requests. Follow IRM 21.5.1.4.10, Classified Waste.
    6
    ID Theft Correspondence (not Form 14039)
    • Ensure submission is not a duplicate that has already been processed.

    • Send Letter 131C, Request for Information, with Form 14039 , Identity Theft Affidavit. See Letters Job Aide for a list of paragraphs.

    • Input TC 971 AC 522 on ENMOD using "WI IVO OTHER" for the appropriate year(s).

      Note:

      Exercise caution when contacting the taxpayer by mail. If the address on Form 14039, Identity Theft Affidavit, differs from the address on CC ENMOD, correspond to the address on Form 14039, Identity Theft Affidavit .

    7
    Balance Due Correspondence
    1. Check the Service Center Status

    2. Status 22, route to Automated Collection System (ACS)

    3. If not in Status 22, route to Compliance Services Collection Operations (CSCO)

    4. Input a Command Code (CC) STAUP as needed

    Route per ACS/CSCO Office finder on SERP.
    8
    Requests for blank forms and/or publications
    • Send postcard Publication 5024, Order Notification for Prisoners, to inmate.

    • Input history on AMS, "Request from inmate dated XX/XX/XX for blank publication(s)/form(s). Sent Publication 5024 to taxpayer."

    9
    Tax Law Inquiry/Question
    • Send tax law question postcard to inmate.

    • Input history on AMS, "Tax Law Inquiry from inmate dated XX/XX/XX. Sent Publication 5024 to taxpayer."

    10
    Handwritten/Typed Transcript Requests
    Route to: IRS, Austin Service Center, Attn: A. B. St. Clair, Stop 6567 AUSC.
    11
    Request from Identity Theft victim for copy of fraudulent return(s) involving refund-related identity theft where return was accepted and processed by the Service
    Follow IRM 25.23.3.2.6.1, Responses to Open Cases.
    12
    Open Exam (-L Freeze/TC 420/ TC 424/ CC AMDISA)
    Exam Employee Group Finder on SERP.
    13
    Open AUR (TC 922, CP 2000, open/closed control)
    AUR office listing on SERP.
    14
    OIC cases (TC 480/ TC 481/ TC 482/ TC 780/ TC 788)
    COIC routing guide on SERP for Offer in Compromise correspondence (open cases). Use the MOIC routing guide on SERP for ACCEPTED Offer in Compromise correspondence.
    15
    Replies to 105C/106C Letters
    Return to originating office.
    16
    Requests for an appeal
    Use the Appeals case routing guide on intranet for 105C, Claim Disallowed, or 106C, Claim Partially Disallowed, letter responses (look under Non-Docketed Including Claims).
    17
    Other Replies
    Route to Controlling Office
    18
    Address Change Requests
    In most cases, treat a Form 8822, Address Change Request as classified waste. Do not change or update address.

    Exception:

    If there is an -S freeze for an undeliverable refund and the return verifies, route to BSC Refund Inquiry Team.

    • Prison to Prison is permissible.

    • Prison to Non-Prison is permissible with verification of identity and release.

    • Non-Prison to Prison is permissible with verification of identity and incarceration.

    • Changes to address (adding inmate number, correcting typographical error, changing prison’s physical address to prison’s mailing address, etc.) are permissible.

    19
    Frivolous Correspondence/Claim
    See IRM 25.25.10-1, Frivolous Arguments, for examples (NOT exhaustive). Route to: IRS, Attention: Frivolous Return Program, 1973 N Rulon White Blvd, M/S 4450 OSC, Ogden, UT 84404.
    20
    Cases with Criminal Investigation Division Indicator(s)
    See your lead.
    21
    Form 14039, ID Theft Affidavit
    See 25.25.9.6, Prisoner Lead ID Theft Form Receipts.
    22
    Form 1040-X, Amended U.S. Individual Income Tax Return
    • Follow IRM 25.25.2.11(2), Amended Returns. Send the Form 1040-X, (amended return) and 1040X Referral Return Form to Accounts Management (AM). See Exhibit 25.25.2-2, 1040X Referral Return Form.

    • If there is an open Exam case, follow CC AMDIS routing.

    • Add a note in EFDS and AMS "BF1040XGOOD" or "BF1040XBAD" .

General Agreement on Tariffs and Trade (GATT) Returns

  1. Legislation in 1994 implementing part of the General Agreement on Tariffs and Trade (GATT) (IRC §32(c)(2)(B)(iv)), excluded amounts received for services provided by an inmate at a penal institution from the definition of earned income for the earned income tax credit (EITC) and credits which utilize the EITC definition of earned income. GATT returns are identified when a filer claims EITC (or a refundable credit that uses EITCs definition of earned income) based on valid wages and withholding earned while an inmate.

  2. Generally, most prisoners who file returns containing wages earned while incarcerated, regardless of filing status, are not entitled to the following refundable credits:

    • Earned Income Tax Credit (EIC)

    • Additional Child Tax Credit (ACTC), when claiming 2 or less children

    • Making Work Pay Credit (MWPC)

    • Recovery Rebate Credit (RRC)

  3. If you receive a prisoner check, please forward to Kansas City, Integrity and Verification Operation (IVO).

    • MS 6575 Prisoner Check KCSC, 333 Pershing Rd, Kansas City, MO 64108.

Prisoner Lead Processing Returns (Kansas City)

  1. Log the receipt of all Prisoner Returns in a master listing. After returns are completed by tax examiners, log the disposition of all returns in the master listing.

    Note:

    IDOCs on all returns should be captured on the spreadsheet.

  2. Tax examiners will take the following actions on all returns:

    1. Input TC 971 AC 134 on the corresponding tax module

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  3. Returns meeting IVO interest:

    1. Stamp "IVO REV"

    2. "1" Code the return

    3. Establish a monitor control base using "BBMONITOR,A,MISC" Send the return for processing.

    4. Once the return posts to EFDS, load all IDOCs, notate and disposition as appropriate, then close the IVO control base.

    Note:

    If sent to AQC as GATT, send to scheme, update in STARS to category 8 disposition TT, enter CC TXMOD history item "GATTTOAQC" . Input TC 290 .00 HC 4.

  4. Returns not meeting IVO interest:

    1. Stamp "IVO REV"

    2. Input TC 972 AC 134 with a 1 cycle delay

    3. Establish a monitor control base using BB-REFILE,A,MISC and send the return for processing.

    4. Once the return posts to EFDS, load all IDOCs, notate and disposition to refile and close the IDRS control base.

Prisoner Lead ID Theft Form Receipts

  1. Review AMS, CC TRDBV for transcribed, scanned, amended or duplicate returns.

    Note:

    Exercise caution when contacting the taxpayer by mail. If the address on Form 14039, ID Theft Affidavit , differs from the address on CC ENMOD, correspond to the address on Form 14039.

    1. Review form to determine if filer is claiming his/her tax professional engaged in Preparer Misconduct with respect to their filing, rather than a real ID Theft issue.

      If Preparer Misconduct is alleged: Follow procedures above in section entitled "Preparer Complaint."

      If Preparer Misconduct/Complaint is not alleged, see #2 below.

    2. Route to Identity Theft Victim’s Assistance (IDTVA)..

Refund Inquiries

  1. Research the account for IVO involvement and check the Electronic Fraud Detection System (EFDS) for current disposition. If there is an IVO -R or P- freeze on the account and verification is not complete, see the table below:

    Note:

    If no IVO involvement on the account, route to CIS.

    If EFDS Action IDRS Action
    1
    All income document(s) (IDOC(s)) verify good
    Disposition all IDOC(s) that are in Contact Employer (CE) and refile the return If normal filing pattern is met, input Transaction Code (TC) 290 .00 to release the refund.
    2
    Some or all IDOC(s) verify Bad or Incorrect dollars
    Disposition all IDOC(s) that are in CE and push to scheme per state mapping  
    3
    Schedule C or Household Help Income (HSH)
    • Review the account to determine if the current return meets taxpayers’ normal filing pattern.

    • If normal filing pattern is met, refile return and update notes in EFDS

    • If normal filing pattern is not met, push to scheme, stop the refund, see IRM 25.25.2.4, Stopping / Releasing the Refund, and forward to Exam on referral spreadsheet.

     
    4
    Unsubstantiated wages or withholding
    If the wages and/or withholding cannot be verified per Information Returns Processing Transcript (IRPTR) data, review other internal sources for the IDOC(s) to verify or push to scheme see IRM 25.25.3.2, Verification of Income Take no action.
  2. If you click the CE button and it is in Hold "SA Requested" and the TE is unable to place back in "SA Requested" , the TE can edit the employer information. The employer notes will pop up, requiring a note to be input. Input a “.” and close the notes. Disposition the return and put "Hold On Rest" in the Group Disposition. After that, put the employer back into "Hold Other" and then give your lead the Employer Identification Number (EIN) so that it can be placed back in Hold "SA Requested" .

  3. If the return is in Scheme, Tracking And Referral System (STARS) follow table below:

    Note:

    A reason and the document locator number (DLN) must be entered in the return's STARS or EFDS notes section whenever requesting a return be deleted from STARS.

    If EFDS Action IDRS Action
    1
    Return is bad or incorrect dollars and no Computer Paragraph (CP) 05A has been sent or CP 05A sent prior to date of correspondence
      Do NOT release refund.
    2
    All IDOC's verify Good
    Close the STARS disposition and input appropriate disposition note.
    • Input TC 290 .00 to release the refund to taxpayer.

    3
    Return is bad or Incorrect dollars and STARS disposition is "NR" or "Blank"
    Change STARS return status to "CA" or "CE" and enter note: "PR CORR rec'd Income does not verify" . Update STARS return status to" CA" or "CE" Do NOT release refund.
    4
    Return is bad or incorrect dollars and STARS disposition is "OTHER" than "NR" or "Blank" and disposition date is over 60 days old
    Change STARS return status to "CA" or "CE" and enter note: "PR CORR rec'd Income does not verify" . Update STARS return status to "CA" or "or CE" Do NOT release the refund.
    5
    Return is bad or incorrect dollars and STARS disposition is "OTHER" than "NR" or "Blank" and disposition date is within 60 days
    Do not update STARS disposition Do NOT release the refund.

Prison Leads Involving Refund Checks

  1. Leads are received in Kansas City from prisons regarding refund checks issued by the Department of Treasury.

    Note:

    Other sites receiving a prison lead regarding prisoner refund checks should route the lead to Kansas City, fax number 855-841-6080.

  2. All prisoner checks received in Integrity and Verification Operation (IVO) will be sent to Kansas City.
    Mailing Address is, Internal Revenue Service, MS 6575 Prisoner Check KCSC, 333 W Pershing Rd, Kansas City, MO 64108.

  3. Kansas City (Only) Tax Examiners (TEs) will follow procedures below in IRM 25.25.9.8.1, Prisoner Refund Check Inquiries and Processing Returned Prisoner Tax Refund Treasury Checks - Kansas City ONLY.

    Note:

    Route other payment types (money orders or checks payable to the Department of Treasury, etc.) to the appropriate campus Submissions Processing (SP) Payment Processing Unit (PPU) function.

  4. Update the 201X, Prison Check Request Spreadsheet, located on the Austin shared server.

Prisoner Refund Check Inquiries and Processing Returned Prisoner Tax Refund Treasury Checks – Kansas City ONLY

  1. These instructions should be followed by Kansas City; all others see IRM 25.25.9.8, Prison Leads Involving Refund Checks.

  2. Unit Control Clerk (UC) will log receipt of all Prisoner Checks in a master listing. The clerk will then file checks received for assignment to examiners. After completion by the tax examiners, the UC will also log the disposition of all checks.

  3. If the tax examiner receives an inquiry (copy of check or telephonic/fax/email/written inquiry) regarding the validity of a check in a correctional facility’s possession OR a returned prisoner tax refund check from a correctional facility, the examiner will take the following steps:

    Review CC FTBOL and Prison-Provided Incarceration/Release information as well as researching the underlying return for IVO interest as described in IRM 25.25.9.5(2), Prisoner Lead Processing Returns (Kansas City). In addition, review for disallowed payments on the module, and then follow the If/Then Chart below:

    If And Then
    1
    Filing is of IVO interest
    it is from an inquiry
    Request the return of the referenced check.
    1. Advise stakeholder the Service will be requesting the return of the referenced check.

    2. Do not disclose any specific information regarding the taxpayer’s account.

    3. Prepare Memorandum for Return of Erroneously Issued Income Tax Refund Check for managerial approval and signature.

    4. Send the signed, approved memorandum to the facility via the approved method.

      Reminder:

      The memo must be signed by the supervisor or the acting supervisor prior to faxing to the prison. See IRM 11.3.1.14, Facsimile (FAX), Electronic Facsimile (E-FAX), and IRS Internal Enterprise Electronic Facsimile (EEFAX) Transmission of Tax Information.

    5. Place a copy of the memo and fax sheet in the required Prisoner folder.


    Account Resolution:
    1. Access TCIS and cancel the check with reason "F" , if not already done.

    2. Document AMS and EFDS (on the return associated with the refund) that TP can expect contact and identify the issue(s) with filing (e.g. GATT, inflated withholding, etc.).

    3. Input TC 971 AC 134 and TC 290 .00 with HC 4 to post the - K Freeze.

    4. Send return through appropriate IVO treatment stream (manual referral to AQC, WOW, Exam or systemically through STARS).

    5. Open IDRS control base to yourself "PRSLEAD,A,MISC" .

    6. Input IDRS history item "DONOTRFUND" .


    If GATT:
    1. Input history on CC TXMOD "GATTTOAQC" .

    2. Update STARS to Category "8" , disposition "TT" .

    2
    Filing is of IVO interest
    it is from a returned check
    Account Resolution:
    1. Access TCIS and cancel the check with reason "F" , if not already done.

    2. Document AMS and EFDS (on the return associated with the refund) that TP can expect contact and identify the issue(s) with filing (e.g. GATT, inflated withholding, etc.).

    3. Input TC 971 AC 134 and TC 290 .00 with HC 4 to post the - K Freeze.

    4. Send return through appropriate IVO treatment stream (manual referral to AQC, WOW, Exam or systemically through STARS).

    5. Open IDRS control base to yourself "PRSLEAD,A,MISC" .

    6. Input IDRS history item "DONOTRFUND" .


    Refund Check Cancellation.
    1. Send stamped "VOID" check on Form 3210, Document Transmittal, to: Regional Finance Center (RFC), Department of the Treasury, Attn: Mail Room Leads, PO Box 51315, Philadelphia, PA 19115.

    2. Monitor the account for the credit posting.

    3. Once the refund has posted to the account (TC 841), close the IDRS control base.

    4. Update the 201X, Prison Check Request Spreadsheet, located on the Austin shared server.


    If GATT:
    1. Input history on CC TXMOD "GATTTOAQC" .

    2. Update STARS to Category "8" , disposition "TT" .

    3. If prior year, manually refer to AQC.

    3
    Filing is not of IVO interest
    it is from an inquiry
    1. Advise stakeholder the Service is not requesting the return of the referenced check.

    2. Do not disclose any specific information regarding the taxpayer’s account.

    3. Input TC 971 AC 134 on the corresponding tax module (if one does not already exist) and then input a TC 972 AC 134 with a 1 cycle delay (this is for tracking purposes).

    4. Notate AMS and EFDS as appropriate.

    5. Ensure the valid return is deleted from STARS by updating the disposition to DL. A reason must be entered in the return's STARS or EFDS Notes when requesting a return be deleted from STARS.

    4
    Filing is not of IVO interest
    it is from a returned check Research TCIS.
    The check was previously cancelled per TCIS:
    1. Send stamped "VOID" check on Form 3210, Document Transmittal, to: Regional Finance Center (RFC), Department of the Treasury, Attn: Mail Room Leads, PO Box 51315, Philadelphia, PA 19115.

    2. Monitor the account for the credit posting by opening a control to yourself "WAITFOR841,A,MISC" .

    3. Once the refund has posted to the account (TC 841), release the refund and close all IVO controls.

    4. Update the 201X, Prison Check Request Spreadsheet, located on the Austin shared server.


    The check was not cancelled per TCIS:
    1. Return check "LIVE" , DO NOT VOID, to the facility on Letter 4877.

    2. Input TC 971 AC 134 on the corresponding tax module (if one does not already exist) and then input a TC 972 AC 134 with a 1 cycle delay (this is for tracking purposes).

    3. Notate AMS and EFDS as appropriate.

    4. Ensure the valid return is deleted from STARS by updating the disposition to DL. A reason must be entered in the return's STARS or EFDS Notes when requesting a return be deleted from STARS.